Guest Column

Clubbed

It was Groucho Marx who famously stated, "I would never belong to any club that would have me as a member."

Smart guy. If he were still around today Groucho would never find himself at the checkout counter fumbling through dozens of club cards. Of course for his obstinacy he'd have to pay exorbitant prices, and most other shoppers would figure he was nuts.

Personally, I haven't enjoyed being in a club since Cub Scouts. Yet, I'm in the Sandwich Club (at my local store you buy five and the sixth sandwich is free); I'm in the Yogurt Club (where the 11th is free); I also belong to the Wellness Club at the pharmacy, the Rewards Club at the bookstore, plus the Video Club and the Carwash Club to name just a few. When I travel I try to always stay at the hotel that honors my Gold Club Membership. And day in and day out there's the biggest fraternity of all: the Supermarket Club.

A company in Cincinnati that keeps track of these things says American consumers now hold 1.8 billion memberships in retail clubs, or "loyalty programs" as the industry terms them. That works out to 14.1 memberships per household.

And what are consumers getting for all this besides a bulge in the wallet, as more cards squeeze in where the cash used to be? Not many bargains, that's for sure. It's been pretty well documented that virtually all retailers offering discounts to club members have jacked up prices so that members wind up paying about the same as they would at a store that didn't have a club.

The primary benefit to retailers is that clubs allow them to gather data about customers' habits and preferences. This information is valuable in designing the next round of promotions and sales, as well as targeting e-mail offerings to club members based on their purchasing history.

Then there's the "loyalty" piece, which presumably draws consumers to stores to which they "belong." Trouble is, with nearly 2 billion memberships out there, many consumers now have cards for every shopping occasion. How much loyalty can, say, each of the three pharmacies in a town expect if shoppers carry cards from all three stores?

Rite Aid, which launched its Wellness Club just eight months ago, has already enrolled 29 million members. To promote loyalty, Rite Aid offers three levels of membership -- Plus, Silver and Gold -- with rewards growing at each plateau.

As the Los Angeles Times put it, the goal of all such clubs is "to cater to the deal addiction of cash-strapped customers."

Like South American countries that balance the books by revaluing their currency, many merchants are upping their club deals by selling admission to higher levels of membership. At Borders books, for example, the plain old Rewards Card is still free, but now there's the Rewards Plus Card that sells for $20 a year and provides better discounts and other perks. GameStop also has a free club, but now sells membership in its Power Up Pro section for $14.99.

These schemes may be intended to make elite members feel special, but the actual effect seems to be that regular shoppers feel left out and ripped off.

Supermarket News magazine quoted a store owner in Bend, Ore., Rudy Dory, who actually said, presumably with a straight face, that his program is designed so that employees can identify club members and treat them with "extra friendliness and consideration."

That really gets to the heart of why Groucho would have hated shopping clubs. Here's a final thought from the comedian who, it seems, was quite the prescient shopper: "I have a mind to join a club and beat you over the head with it."

- Peter Funt is a writer and the long-time host of "Candid Camera (www.CandidCamera.com).